Even IPO feint can’t hold biometrics investments below six-figure increase
A major telecom is moving into biometrics, with an impressive price tag unveiled for the previously-hinted at sale of VisionLabs, while Totm has likewise shifted further into biometrics, but through divestment of its telecom businesses. Numbers have also been revealed for a financing round Fingerprint Cards recently tipped, as it plans to accelerate growth. The VisionLabs and FPC deals represent over $125 million changing hands between them. Perhaps most predictable of the big-money announcements is the suspension of SenseTime’s IPO, which had been planned for Friday.
Sberbank divests VisionLabs
VisionLabs is being acquired by MTS, Russia’s largest telecom, in a 7 billion-rouble (US$95.4 million) deal to add biometrics to a growing portfolio of diversified products and services, Reuters writes.
Sberbank is selling a stake of just over 25 percent of VisionLabs, as it pivots to a focus on biometrics competitor Speech Technology Center, as it signaled it would earlier this year. At the time, MTS’ largest shareholder Sistema, or one of its affiliates, was reported as the prospective buyer.
Intema, a subsidiary of MTS AI, will acquire 100 percent of VisionLabs’ equity from existing shareholders. That means the company’s founders, who held 51.77 percent prior to the deal according to Reuters, are giving up their stake. The final price will be determined based on the company’s performance over the next three years.
MTS is targeting a 60 percent share of revenue generated by businesses outside of its telecommunications core by the end of the 2020s, according to the report.
The telecom also began issuing SIMs from kiosks integrating Smart Engines’ ID document scanning and VisionLabs’ biometrics in late-2019.
Sberbank acquired its share of VisionLabs in 2017, and says the value of its stake has increased by more than 3.7 times since then.
Totm exits telecom to focus on biometrics
Totm Technologies is divesting its telecommunications assets as it continues its shift towards providing biometric solutions for businesses, according to a public filing reported by Singapore’s The Business Times.
Recently rebranded from Yinda Infocomm, Totm plans to sell off its Yinda Technology Singapore and Yinda Technology (Thailand), which are not currently profitable, for a nominal price of S$1,001 (roughly $732). Including conditions and debt considerations, Totm’s board estimates the sale will net the company S$415,000 ($303,500).
Totm’s board says the sale will further its diversification into identity management with biometric solutions.
Immediately after divesting the telecom lines, Totm and its InterBIO subsidiary have invested S$5.13 million ($3.75 million) into Cakrawala Data Integrasi (CDI) to bring fast and cost effective biometric identity verification-as-a-service to Indonesian businesses, The Edge Singapore reports.
The investment comes in the form of a convertible loan, and comes with an exclusive cooperation agreement.
CDI won a Platform Bersama (joint platform) license from Indonesia’s Directorate General of Population and Civil Registration and Ministry of Home Affairs (Dukcapil) to facilitate the inclusion of small and medium-sized enterprises in the selfie biometric IDV and authentication scheme. CDI says it will put proceeds from Totm’s investment towards supporting the platform.
Sixty percent of CDI’s revenues from Platform Bersama will be shared with InterBIO or PT International Biometrics Indonesia.
“InterBIO will take a leadership role in delivering identity management solutions to CDI’s customers with its existing suite of biometrics solutions such as BioCheck, BioCode and BioWatch as well as passive liveness e-KYC solutions offered by GenesisPro,” says Totm Technologies CEO and Executive Director Pierre Prunier.
CDI was already partnered with Totm and InterBIO as the leader in a consortium that won a $3.6 million contract in October with Indonesia’s government to provide integration services for a security platform.
Fingerprint Cards plans SEK 300 million bond issue
Fingerprint Cards is planning to raise SEK 300 million (US$33 million) through an issue of senior secured bonds, as it attempts to accelerate the growth of its biometric sensor and software business. The capital will be used to cover its general corporate expenses, including investments in working capital and research and development.
Carnegie Investment Bank will arrange a series of investor meetings as Sole Bookrunner to explore the conditions for the fundraise. The bond issue is expected to take place in the near future, according to the announcement.
The company recently announced a plan to divide its business between two units, one focused on selling biometrics to OEMs, and the other dedicated to biometric payment cards and related technologies.
The possibility of a debt capital financing round to provide funds for growth acceleration was mooted in FPC’s third-quarter report.
SenseTime committed to IPO after pause
The move by the U.S. government extends the restrictions placed on SenseTime when it was included on the Entity List to bar American entities from owning its shares.
SenseTime says it will publish a supplemental prospectus and an updated schedule, and refund investors’ IPO applications, but remains committed to completing the offering, the South China Morning Post reports.
A group of investors had claimed more than half of the IPO, but all were China-based, and most state investors. Several U.S. investors took pre-IPO stakes in SenseTime.
Several major brokers said they would waive fees and interest associated with the delayed offering.
The U.S. restrictions are based on accusations of involvement in human rights abuses in Xinjiang which SenseTime calls “unfounded,” suggesting the American government holds a “fundamental misperception” of its business. The company suggests it has been “caught in the middle of geopolitical tensions.”